12th
Dec 2016
A leading property franchise is confident that rents will rise across the UK over the next few years outstripping house price increases.
Chief Operating Director of the property franchise, Dorian Gonsalves, is predicting that by 2020 rents will have risen on average by 15% and he blames “a raft of recent anti-landlord government policies in the past year”, obviously this will differ from region to region.
The much maligned increase of stamp duty costs, the reduction of mortgage tax relief, harder lending criteria to be imposed by the Prudential Regulation Authority, as well as the 10% 'wear and tear' standard allowance no longer being allowed, is causing many landlords to incur a loss.
Gonsalves said: “Throughout 2017 we will continue to work with decision makers and we hope that some of the government’s recent changes will either be reversed or incentives will be launched to help drive up the supply of rental properties. This would then bring down rents and benefit millions of tenants, making for a healthier rental sector.”
The property franchise's Q3 rental index showed that 88% of offices reported a surge in demand for houses to rent. Research also shows that 86% of tenants , accounting for nearly about 6 million households, could not put together funds for a 5% deposit (on average £8,838) to buy their own home and more than likely will never be able to.
Gonsalves commented: “People from all walks of life, including students, migrant workers and professionals with families, are struggling to meet stringent lender affordability ratios.
“When someone is not in a position to buy, they obviously start looking for somewhere to rent, but unfortunately, government policies seem to lack any direction, and have done nothing to benefit either landlords or tenants, so tenants could find it more difficult to find good quality suitable accommodation in 2017 and beyond.”
An association of letting agents also agrees that rents will rise as there is a drop in the number of homes available and of course the rules of supply and demand apply.
David Cox, managing director of the association, said :“Following the announcement of an outright ban on letting agent fees during the Chancellor’s Autumn Statement, we expect rent prices to rise and tenants to be forced to look for properties in cheaper areas.
“The government continues to lash out against the private rented sector to cover its own failure to build the number of homes this country needs. Such policies will have a detrimental effect on the very people the government aims to help the most. As a result, we predict 2017 will be a raw year for renters”.
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